The U.S has yet to use a weapon in its economic arsenal in its dispute with Russia over Ukraine. The administration could release oil from the Strategic Petroleum Reserve, in a bid to reduce global oil prices and damage the Russian economy, says billionaire investor George Soros -- though he hopes it doesn't come to that.

"The strongest deterrent is in the hands of the United States because it can release oil from the strategic oil reserve," Soros says, "which would then reduce the price of oil and that would ruin the Russian economy, which lives on oil."

In an interview to promote his new book,"The Tragedy of the European Union", Soros told Marketplace that the sanctions the West is imposing on Russian oligarchs could be counter-productive.

"The Russian economy is very weak because the oligarchs who run the country don't trust it and they send their money abroad," Soros says. "So if you stop the inflow of funds, that will bring the Russian economy to its knees."

He says when Russian investors and oligarchs take their assets out of the country, it helps weaken the Russian economy. The sanctions, which impede the flow of money out of Russia for targeted individuals, may actually benefit Russian president Vladimir Putin's attempts to bolster his country's economy.

Soros says the U.S. and Europe need to back Ukraine's position in this dispute, rather than punish Russia.

"It was the euro crisis that transformed this voluntary association of equals into a creditor-debtor relationship," Soros says. "And because of this transformation, we have now reached a state where you are going to have one political crisis after another."